Decent returns on managed aggressive funds

FUND FOCUS: MANAGED AGGRESSIVE: Best performer YTD: Acorn Life Managed Growth +9.8%

Worst performer YTD:Merrion Active Fund +1.4%

Managed aggressive funds are performing well in the current environment, offering investors exposure across several asset classes, which is producing decent returns.

According to MoneyMate, so far in the year to October 22nd, Irish managed aggressive gross domestic funds have returned 6.1 per cent, or 8.8 per cent in the previous 12 months.

Leading the rankings is Acorn Life’s Managed Growth fund which is up by 9.8 per cent so far in the year to October 22nd, or 13.4 per cent in the previous 12 months, followed closely by Royal Liver’s Managed Growth fund, which has returned 9.7 per cent so far this year, or 10.5 per cent over previous 12 months.

The fund looks to maximise returns in the medium to long term whilst reducing investment risk by participating in a broad range of global stocks and shares. At present, it has a 46 per cent allocation to global equity; 12 per cent to UK equity; 10 per cent to Irish equity; 24 per cent to fixed interest and 7 per cent in cash.

Gary Moglione, fund manager at Royal Liver, says the global equity portion of the fund, which has a strong bias towards emerging markets in particular Brazil, has performed well, while UK equities have benefited from a mid-cap bias and MA activity.

The fund’s fixed interest allocation has also performed well, due to its bias towards core European countries, such as Germany, France and the Netherlands, where yields have fallen, unlike what’s happening in the peripheral countries such as Ireland.

Looking ahead, Moglione says the fund will retain a bias towards emerging markets, “which we expect to outperform developed markets as the primary driver of global GDP”, while in Europe it will also focus on “cash-rich high- quality companies that can perform well in slow-growth environments”. It will also stay overweight in fixed interest allocations to core Europe sovereigns.

While Merrion Stockbroker’s Active Fund is at the end of the managed aggressive rankings, it is still in the black so far this year, having returned 1.4 per cent, or 1.2 per cent in the previous 12 months.

The fund, which is currently taking a defensive strategy by allocating heavily to cash, can hold short as well as long positions and can also use modest levels of leverage.